The Federal Maritime Commission (FMC) is conducting an investigation into Mediterranean Shipping Company (MSC) for alleged violations of the US Shipping Act. The investigation centers around MSC’s billing practices concerning demurrage and detention (D&D) charges, totaling over $2 million.

The FMC conducted an audit of MSC’s D&D charges in 2021. It is claimed that MSC was billing the same daily rate for both operating and non-operating reefers (NORs), despite stating otherwise through its US agent.

Customers allegedly disputed operating reefer detention or demurrage charges on approximately 925 occasions, leading to refunds totaling $1.2 million. Furthermore, in 2021, there were 1,704 alleged overcharges for NORs that went undisputed, resulting in MSC retaining approximately $857,944 in extra revenue.

The FMC alleges that the practice of misapplying operating reefer rates to NOR shipments had become a “normal and customary” practice by MSC, which is said to be in contravention of the Shipping Act.

The FMC notes that MSC failed to provide separate D&D charges for NORs for public inspection until March of the current year. The information was obtained from bills of lading supplied by MSC customers.

The FMC has been investigating various carriers for potential unfair practices, especially during the pandemic when shippers were in urgent need of capacity. Other carriers, like Hapag-Lloyd, Hamburg Süd, and OOCL, have faced complaints and significant claims related to D&D charges.

The text mentions examples of other financial claims related to D&D charges, such as Rahal International seeking repayment of $300,000 from Hapag-Lloyd, Hamburg Süd being ordered to pay $9.8 million to OJ Commerce, and Bed, Bath & Beyond pursuing a $38 million claim against OOCL.